[F127.—(1) During the financial year beginning on 1st April 2025 and every subsequent financial year, a local authority—
(a)subject to paragraphs (3) and (4), must charge to a revenue account a minimum amount (“minimum revenue provision”) for that financial year in respect of all capital expenditure financed by debt and incurred by the local authority in that year or any financial year prior to that year, and
(b)may charge to a revenue account any amount in addition to the minimum revenue provision, in respect of any capital expenditure financed by debt and incurred by the local authority in that year or any financial year prior to that year.
(2) During the financial year beginning on 1st April 2024 and every subsequent financial year, a parish council or charter trustees may charge to a revenue account any amount in respect of capital expenditure financed by debt and incurred by the parish council or the charter trustees, as the case may be, in that year.
(3) Where a local authority incurs capital expenditure financed by debt during a financial year, the authority may charge the minimum revenue provision in respect of that expenditure to a revenue account for—
(a)the following financial year, or
(b)in relation to an asset, if later, the financial year immediately after the financial year in which the asset first becomes available for use.
(4) A local authority may choose not to charge minimum revenue provision to a revenue account in respect of the financing by debt of a loan given by that authority to any person or body, where—
(a)the loan is treated as capital expenditure in accordance with regulation 25(1)(b),
(b)the loan is not a commercial loan, and
(c)the local authority has not recognised, in accordance with proper practices, any expected or actual credit loss in respect of that loan.
(5) In this regulation—
“a commercial loan” is a loan given—
as an investment for financial return, or
towards expenditure which would, if incurred by the authority, be an investment for financial return;
“an investment for financial return” is an investment which is made primarily to generate financial return.]
Textual Amendments
28.—[F3(1)] A local authority shall determine for the current financial year an amount of minimum revenue provision which it considers to be prudent.
[F4(2) The amount determined under paragraph (1) must include an amount equal to any expected or actual credit loss which—
(a)relates to a loan given by the local authority to any person or body on or after 7th May 2024, and
(b)is recognised by the authority during the current financial year in accordance with proper practices.
(3) A local authority may reduce the amount specified in paragraph (2) by deducting—
(a)any amount of minimum revenue provision the local authority has already charged to a revenue account in respect of the financing of the loan, and
(b)any amount of receipts, capital or otherwise, used to repay the principal of any amount borrowed to finance that loan.]
[F5(4) Subject to paragraph (5), a local authority must not reduce its determination of what would otherwise be a prudent amount by the value of any capital receipts used, or to be used, by the authority in accordance with regulation 23(b) or (d) in the financial year to which the determination relates.
(5) Where paragraph (6) applies, the authority may reduce its determination of what would otherwise be a prudent amount—
(a)in respect of the financing of a loan, by deducting any amount of the capital receipts—
(i)received in respect of that loan during the financial year, and
(ii)used to repay the principal of any amount borrowed to finance that loan;
(b)in respect of the financing of a capital asset to which a lease arrangement relates, by deducting any amount of the capital receipts—
(i)received under that arrangement during the financial year, and
(ii)used to meet any liability in respect of that arrangement, other than any liability which, in accordance with proper practices, must be charged to a revenue account.
(6) This paragraph applies where—
(a)a local authority has—
(i)incurred expenditure through the giving of a loan which is treated as capital expenditure in accordance with regulation 25(1)(b),
(ii)received loan repayments in respect of that loan which are treated as capital receipts in accordance with regulation 7, and
(iii)determined that it will charge minimum revenue provision in respect of the financing of that loan, or
(b)a local authority—
(i)has received sums under an arrangement which is treated, in accordance with proper practices, as a finance lease, and
(ii)those sums are treated for the purposes of Chapter 1 of Part 1 (capital finance etc) as capital receipts.
(7) The capital receipts specified in paragraph (5)—
(a)may not be used to reduce the amount specified in paragraph (2);
(b)despite section 9(4) (“capital receipt”), must actually be received by the authority.]]
Textual Amendments
F2Reg. 28 substituted (31.3.2008) by The Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2008 (S.I. 2008/414), regs. 1(1), 4(1)
F3Reg. 28 renumbered as reg. 28(1) (7.5.2024) by The Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2024 (S.I. 2024/478), regs. 1(3), 2(4)(a)
29.—(1) Where in any financial year beginning before 1st April 2007, the amount of minimum revenue provision charged by a local authority to a revenue account is less than the amount required for that year (whether by reason of an error in the calculation of that amount or otherwise)—
(a)if the local authority has not made a charge to a revenue account on or after 1st April 2004 to correct the insufficient provision, the amount so charged shall be treated as correct and shall not be reconsidered in any circumstances; or
(b)if the local authority has made a charge to a revenue account on or after 1st April 2004 to correct the insufficient provision, the local authority may, in a financial year beginning before 1st April 2010, record in a revenue account a credit no greater in value than the amount of that charge.
(2) Any local authority which treats any amount as correct under paragraph (1)(a) shall include a note to that effect in its statement of accounts for a financial year ending no later than 31st March 2010.
(3) Any local authority which records a credit in a revenue account under paragraph (1)(b) shall include a note to that effect in its statement of accounts for the year in which the credit is recorded.
(4) In this regulation, “minimum revenue provision”—
(a)in relation to financial years beginning before 1st April 2004, has the same meaning as was given in relation to those years in section 63(1) of the Local Government and Housing Act 1989 prior to its repeal; and
(b)in relation to subsequent financial years, has the meaning given in regulation 27.]
Textual Amendments
F6Reg. 29 substituted (31.3.2008) by The Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2008 (S.I. 2008/414), regs. 1(1), 4(2)
Commencement Information
I1Reg. 29 in force at 1.1.2004 for specified purposes and 1.4.2004 in so far as not already in force, see reg. 1(1)